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Private Briefingwith WILLIAM PATALON III, Executive Editor
Ask any of our gurus for advice on how to survive a stock-market sell-off – or even a whipsaw period like the one we’re navigating now – and you’ll get a surprising answer.
Keep a shopping list ready, they’ll tell you…
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Lately there has been quite a divergence in the behavior of those investing in silver compared to those holding gold.
One group is running scared, while the other is calmly stocking up.
It looks as if many of the weak hands holding gold in the form of exchange-traded funds (ETFs) are giving up and liquidating their positions. A record $4.1 billion was yanked out of gold ETFs in the month of February, a record high, according to the BlackRock ETP Landscape report. This figure was almost double the previous record set in January 2011 of $2.6 billion.
But it is quite a different story in the silver market, according to South Africa's Standard Bank. For the week ended March 1, silver ETFs added nearly 68 metric tons to their position. That brought the total silver held within 110 metric tons of an all-time record high.
That compares to 59 metric tons of gold being liquidated from gold ETFs in that same time frame.
Demand for Silver Eagle coins from the U.S. Mint also continues apace. February sales did not match January's record rate, but were still a very robust 3,368,500 ounces.
So, why is investing in silver becoming the favored trend?
The answer is simple: Silver is cheap.
While gold is roughly double its nominal high of $850 in January 1980, silver is still barely half its nominal high of around $50 an ounce set in 1980 and April 2011.
That makes the white metal affordable for the average investor looking to protect the value of his or her money.
French investment bank Societe Generale issued a research report March 4 stating that investors who want to put money into precious metals may increasingly turn to silver as the "cheaper alternative" to gold.
According to some analysts, silver is not only cheap on a nominal basis but also from a valuation standpoint.
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